WSIB Clearance and Purchase Certificates

The Workplace Safety and Insurance Board (WSIB) runs Ontario's no-fault workplace insurance system, funded by employer premiums under the Workplace Safety and Insurance Act, 1997 (WSIA). To protect that funding, the WSIA lets the WSIB collect an employer's unpaid amounts from two other groups: buyers of the employer's business, and businesses that hire the employer as a contractor. The two certificates are how the WSIB agrees in advance not to do that.

Both are issued only if the account is in good standing: open, correctly classified, with all premium reports and reconciliations filed and all amounts owing paid. The validity periods above are as stated on the WSIB's pages as of October 2026; rely on the dates printed on each certificate.

Section 146 of the WSIA applies when an employer sells, leases, transfers or otherwise disposes of all or part of its business, directly or indirectly, to another person. That person is liable to pay all amounts the employer owed under the Act immediately before the disposition, and the WSIB can enforce the debt as if the buyer had been the employer at all relevant times. Trustees in bankruptcy, receivers, liquidators and buyers under a Companies' Creditors Arrangement Act arrangement are excluded.

WSIB policy 14-02-03, which applies to decisions made on or after August 1, 2020, protects buyers who plan ahead. On request, the WSIB issues a purchase certificate that waives the buyer's liability. Key rules:

• The date of disposal is the date of possession, and amounts are calculated to that date.
• If only part of a business is sold, a buyer without a certificate is liable only for amounts related to the part acquired, which the WSIB may pro-rate on asset value.
• A seller with several WSIB accounts needs a certificate for each one.
• The certificate does not release the seller, which stays liable until the seller, the buyer or both pay what is owed.
• The WSIB will not act on a request while the seller's account has an issue under appeal.

Certificates are not issued for share purchases where no assets change hands, amalgamations or name changes, because in each case the WSIB debts stay with the corporation or pass by law to the amalgamated company. In a share deal, the WSIB asks for the share purchase agreement so it can update the existing account, and the buyer's protection is contractual: representations and warranties about WSIB compliance, an indemnity, and often a holdback or escrow from the price. Where the buyer also hires the seller's staff, the employment consequences are covered under successor employer.

1. Get the seller's WSIB account number or numbers and its written authorization early, ideally at the letter of intent stage, because the WSIB will not release the seller's account status to the buyer without it.
2. Complete the Purchase Certificate Worksheet (Form 1238A). The WSIB asks for the account number, vendor and purchaser details, the sale date, whether it is a share or asset sale, the assets being sold, the purchase agreement and whether the vendor will continue to operate.
3. Submit it online or by email before the date of sale, which the WSIB requires.
4. If the seller's account is behind, the seller must file its reports and pay before a certificate can issue. Make delivery of a valid certificate one of the conditions precedent to closing in the asset purchase agreement, with a direction to pay any arrears to the WSIB out of the price if needed.
5. If closing slips past the certificate's 30-day validity, request a new one.
6. After closing, the seller must notify the WSIB of the sale within 10 days and send a closure request stating the last date its workers were employed. If the buyer will employ workers in a covered industry, it must register its own WSIB account within 10 days of becoming an employer.

Outside construction, section 141 applies when a business retains a contractor for work in an industry the WSIA covers. It lets the WSIB deem that business to be the employer of the contractor's workers and liable for their premiums, with a right to recover them from the contractor and set them off against what it owes the contractor. If it is not deemed the employer, the business must still ensure the contractor meets its WSIB payment obligations and is liable to the extent the contractor does not, with a right to be indemnified by the contractor.

In construction, sections 141.1 and 141.2 go further. A person who directly retains a contractor or subcontractor for construction work, whatever its own industry, must obtain a clearance certificate before permitting the work to begin, obtain a new one if it expires or is revoked before the work is finished, and keep it for at least three years. These duties do not apply to exempt home renovation work: work on an existing private residence that the person hiring, or a family member, occupies or will occupy, performed by an independent operator, sole proprietor, partner or executive officer. Independent operators, sole proprietors, partners and executive officers carrying on business in construction are deemed workers, subject to limited exemptions, so even a one-person subcontractor usually needs coverage.

Under WSIB policy 14-02-04, which applies to decisions made on or after September 22, 2025, issuing a clearance waives the WSIB's right to hold the principal liable for the contractor's unpaid premiums for the validity period. Without one, the principal may be liable up to the value of the labour portion of the contract. Clearances are renewed automatically while the contractor's account stays in good standing, so a long job needs a current clearance for each period.

Whether someone is truly a contractor is a separate question; see employee vs. independent contractor. A written independent contractor agreement should require the contractor to keep WSIB coverage, deliver current clearances and indemnify the business.

In acquisition due diligence, the buyer's WSIB review goes beyond the certificate. It should confirm the seller's account numbers and classification, check that premium reports and annual reconciliations are filed, review the claims history and any open claims, and collect health and safety orders. It should also look at how the seller uses contractors: clearances on file for each one, and whether workers paid as contractors are in substance employees whose premiums were never reported.

Lamba Law's free due diligence checklist includes the WSIB account, purchase certificate and claims history items, and our business acquisition due diligence service covers the full review.

Hannah Kowalski's corporation agrees to buy the assets of Meadowvale Grounds Ltd., a Mississauga commercial landscaping and snow-clearing business owned by Victor Nguyen, for $1.1 million, closing October 15. The letter of intent includes Victor's authorization for WSIB disclosure, and the asset purchase agreement makes a valid purchase certificate a closing condition.

Hannah's lawyer submits Form 1238A on September 10. The WSIB advises that the seller has not filed its prior-year reconciliation and owes $23,400, so no certificate can issue yet. Victor files and pays, and the WSIB issues the certificate on September 29. Closing happens on October 15, inside the 30-day window; had it slipped past October 29, Hannah would have needed a new certificate.

After closing, Hannah's company keeps using four snow-clearing subcontractors. Before the season starts, her office downloads a current clearance for each. One subcontractor shows as ineligible, so the company holds back its next payment, as its subcontract allows, until the subcontractor brings its account into good standing and a valid clearance is produced. That keeps money in hand if the WSIB looks to Hannah's company for the subcontractor's unpaid premiums.